Dow, S&P near all-time highs while economy slumps. Why?

Simple dear,

The money movers have FINALLY learned that you don't base estimates of future financial perfomance on past economic data and that Washington can't predict crap.

It's becoming a trench level investor's world. The days of looking down from the Sears tower and guessing what's going to happen are passing. REAL investors are rolling up their sleeves and doing some work now.

Keep watching... it's going to get fun!

Gary

I believe that having information so readily available and now so much easier for the regular joe to invest is drawing more people in, plus retiring boomers are investing to beef up their shrinking savings. Americans are generally optimistic and confident of a turnaround in all downward trends. So the economic downturn is really not fully understood or believed. The super rich will make out like bandits, but only the very educated mid level class will come out ahead. The vast majority of investors now will become sour, I believe, as the war drags on in Iraq and our government will be forced to make up shortages putting the squeeze on the middle class as always seems to be the case.

the economy is not bad it is good I am 65 years old
and make more money and have more now than i ever had in my whole life. I don't know where all this doom and gloom is coming from I DON'T SEE IT
LIFE IS GREAT. ENJOY

The reason is pretty obvious. The economy is in much better condition than the Democratic leaning media want people to believe. With an election coming up, the press has been moaning how bad things are, but they aren't. Unemployment under 5%, steel mills producing heavily, and consumer confidence high. Maybe the anti-Bush folks need to look at whole forest, instead of just a few trees.

the econemy is good not bad i am 65 years old and
make more money and have more than i ever had in my whole life. i don't know why anybody thinks things are bad .

It is simple. PUMP IT AND DUMP IT. ALSO election require low gas prices and high stock market. Bushonian economics.

Aslong as people have any money at all they will spend and buy products and services.The average consumer doesn't pour over economic data before spending they just wait sometimes for a better deal or a better product.But ultimately they will spend. There are companies that are providing these products and they will continue to prosper.Investors want a piece of the pie.

The American people are easily amused,Gas prices drop and the whole world is rosey,what a crock,Im in housing Iknow how bad things are.

I really dont know why. I have given up trying to figure out any rhyme or reason to any of it. I am just happy that my investments are up 10% YTD. However, just remember that the Dow was at almost 11,600 in May this year too. Then by end of June it was down below 11,000 again. Who knows where it will be by the end of the year ? Go figure

i think a combination of housing no longer sucking up money as an investment , so it is going into stocks, and.... dont understimate, it is election year. thats a big one.

I watched CNBC for four days it seemed like every time I tuned in they were saying it was going to rally thru the years end. Yes I'm in.Rock on.

Janet's opinion: I agree with all the other bloggers I read. I think the economy is not as good as during the dot com boom, but still getting better since the dot com bust. Americans have been going back to work since 9/11, gas prices are managable for the time being, there is hope for the future as we look towards the possibility of peace in the middle east as well as further efforts to fight terrorism worldwide with more and more technology. IT people are finally starting to find work again this year after a very long slump. Companies are having to hire Americans because of the possible threat of penalties of hiring illegals. Americans recognized the extreme needs this country has during hurricanes Katrina and Rita and invested in itself. We may be reaping the benefits of this. Bush is doing what he can to stimulate growth in some extremely rough times. There is always room for improvement, but we are starting to have some hope for increased stability and prosperity after some of the roughest times this nation has endured. Furthermore, take a look at our population - nearing 300 million. There has been for as long as people have been recording it, a direct correlation between population growth and economic growth. America has always been and will always be an inventive, strong, and resourceful group of individuals!

It does not take a wizard to see the way the current administration can manipulate fuel and stock prices just before an election, we've seen it in the past and some people must believe in the tooth fairy if they think what you are seeing is real. Yes there are caps on Contributions to Candidates, but you can buy in on all the stocks and bonds you want or if you are in control of oil and gas set prices as you see fit, there by, changing the appearence of the economy. Wake up, cause you sure will after the elections.

In my 60 years of watching the stock market, it always surprises and is not predictable. The news media is infatuated with gloom and doom, yet interest rates are reasonable, we are at almost full employment, and business is growing slowly. The only problem we have is the national debt, and, as long as people believe in our dollar, we are fine and going higher.

Remember elction time a decade ago..."it's the economy, stupid". The current economy is in better shape than many want to come to grips with. Keep in mind that since the DJIA high, inflation has increased approx. 18% and wages have increased approx. 20%, so the markets still have room to grow for parity!

reportedly the real estate market is in big correction so people could believe that stocks are the only alternative ths demand for stocks stimulating this surprising rally. the other factor is that before elections stocks can be manipulaated upwards the rosy environment giving votes to the incumbency. the third is that everybody has been negative which by contrary opinion makes the stock market rally

Simply, there is no correlation between the health of economy and the performance of the stock market. Generally, when we buy a stock, we look ahead of the future, not now.

Interest rates are low for home loans. Most companies are doing well. Home prices are certainly inflated in some states. You read about fear of too many jobs going overseas, but unemployment is not only low, but there are over 150,000 jobs in trucking they can't even fill. I don't understand why the returning veterans can't get a job. Why not train them for some of these jobs in trucking ?
I think Americans have never had it so good, and my memory goes back to the late 40's. Umemployment in my area is 3.4%.

Real Estate prices have slowed and along with it their investment oppurtunity. Interest rates are still low. Baby boomers continue to have money to invest, saving, inheritance, 401k 409k, with no where to go. The markets are it right now.

Market will go high into the first day of oct . Then grab your ankels and prey it dont crash oct have bin bad in history . This time we have elections so it may help . This market is doing the same as last year lets see if novenber brings us 5 % returns like last year . AND ONE MORE DEC DID NOTHING SO BECAREFUL !